X. Politics and Gambling

The relationship between politics and gambling receives considerable attention. One reason is that people's voting behavior often reflects their attitude about gambling. Another reason is the concern about the possible impact on the political process of contributions from gaming interests.

Voting Patterns on Gambling Issues Have Definitely Changed. Before 1989, only one casino legalization effort was successful during the 1970s and 1980s. The vote to legalize casinos in Atlantic City was the only one out of nearly 20 state elections on casino gambling issues to pass. However, there was a much different record on lotteries. Every state but one, North Dakota, has voted yes on stand-alone lotteries.

Since 1989, eight new casino states have emerged. The success of gambling measures is attributed to economic issues which have appeared to drive out morality issues as the major concern of voters and politicians when it comes to gambling. Gambling has been seen as a way to boost the economy and gain public revenues.1

The authors of the book on casino campaigns, The Last Resort, have suggested that a model for casino campaigns is what they call a veto model.2 What they mean is that voters will not approve a casino if there is a significant negative among any of several important factors. These factors include opposition by a Governor or other major political figure, or morality and crime becoming significant campaign issues. The 1996 election has seemed to overturn that rule. Elections on casino gaming were won despite strong negative campaigns and gubernatorial opposition in Michigan, Louisiana, and Arizona. It is surprising that crime did not become an issue that shaped the Louisiana election given the great number of gaming scandals in the state.

Casinos have not required a vote of the people to be approved in every instance. Popular votes occurred in New Jersey, when residents voted for casinos in Atlantic City. Missouri had a statewide election in 1992. Local referenda were required in Missouri, Mississippi, Indiana, and Iowa at various times. These measures passed and paved the way for riverboat gaming's expansion.

Gaming Companies and Tribes Are Large Political Contributors. Evidence of the size and scale of political contributions can be seen in California. In California, the gaming lobby has spent over $10 million since 1990.3

The 1994 gubernatorial election saw significant Indian tribal involvement. The tribes contributed more than $1.5 million to the Democratic party in order to support a gubernatorial candidate who they believed would be more receptive to their gaming efforts.4 Their gubernatorial involvement was part of a larger effort to elect officeholders who would be friendly to their interests. Tribal contributions made to Democrats went from $33,000 in 1992-1993 to $2.4 million in 1994-95. The tribes donated $740,000 to the Umberg campaign for attorney general alone. However, they have also begun to increase their contributions to Republicans.5

The donations of the tribes are not limited to political causes. The tribes also have made donations for symphonies in San Diego and Sacramento.

Following is a table of political donations in California from gambling organizations.

Political Spending

Company

Lobbying

Campaign Contributions*

Total

Hollywood Park Operating Co.

$430,391

$1,420,000

$1,850,391

California Commerce Club

$606,349

$654,360

$1,260,709

Bell Gardens Bicycle Club

$372,204

$773,077

$1,145,281

Oaks Card Club

$207,051

$207,051

Ladbroke Racing Association and affiliated entities

$240,302

$240,302

Table Mountain Rancheria

$52,878

$146,394

$199,272

Rumsey Indian Rancheria

$54,580

$146,500

$201,080

Barona Band of Mission Indians, Barona Casino

$117,774

$210,951

$328,725

Viejas Band of Kumeyaay Indians

$73,559

$228,600

$302,159

Sycuan Gaming Center

$253,745

$253,745

Los Angeles Turf Club

$378,607

$242,720

$621,327

Bay Meadows Operating Co.

$84,593

$178,022

$262,615

De Bartolo Entertainment, Eddie De Bartolo Jr.

$10,000

$167,725

$177,725

Oak Tree Racing Association

$69,998

$207,401

$277,399

Del Mar Thoroughbred Club

$52,500

$175,324

$227,824

Totals

$2,543,735

$5,011,870

$7,555,605

Source: Sacramento Bee

*including local initiatives

On the national level, gambling interests are quite active. The top 10 donations in terms of dollar amount from gambling interests are topped by the Mashantucket Pequot tribe followed by casino companies and technology firms. Gambling is among the top five interest group givers, just below the National Rifle Association.6

The amount of campaign money donated by gaming interests has led to press attention on the issue. In the words of two observers, the candidates are "...raking in Las Vegas money as never before."7 In certain state races, there have been similar patterns of major contributions by gaming interests. In Louisiana, one-third of the campaign contributions are from the gaming industry.8

Gambling Donations and Political Scandals Have Occurred. Because entry into gambling is limited by regulation, there is a potential for corruption in the licensing decision. In Missouri, the attorney general alleges that the house speaker broke the law by accepting funds from casino companies. The aim of the companies, according to the attorney general, was to influence licensing decisions. The result was a grand jury investigation.

In Louisiana, there has been significant criticism of the licensing decisions for casinos. As the economics section notes, there have been several projects that have not been successful.9 Critics blame it on those who received the licenses and the fact that they received the licenses for political reasons rather than merit.10

Scandals in Louisiana Related to Gambling. Louisiana has been seized by a number of scandals related to the gaming industry.

Influence-Peddling Scheme in the Video Poker Industry. The scandal has led to the resignation or electoral defeat of several legislators. The senate president, the senate's most senior member, and the chair of the house committee which deals with gambling bills were all defeated in election campaigns as a result of the gambling scandal. As a result of the scandal, the new governor proposed a referendum on gambling in Louisiana. The election, which is discussed elsewhere in this section, was held on November 5. Each parish had the opportunity to vote on continuing to allow video poker machines and casino gaming within the parish.

The scandal has also led to an FBI investigation. Affidavits based on FBI tapes portray some lawmakers accepting payoffs or campaign donations from gambling lobbyists. Some of the newly-elected legislators that have ousted the incumbents are distinctly anti-gambling. Twenty-one men were convicted or have pleaded guilty to crimes. Many are connected to New Orleans or New York organized crime families.

Skimming on Construction Contracts: A crony of former Governor Edwin Edwards named William Broadhurst, is awaiting trial on charges he skimmed money off of a construction contract for a riverboat casino.

Improper Influence For Casino License: The State licensing agency conducted its own investigation into the case and then voted to close it without issuing a report. The FBI subpoenaed the records the day after the vote. There are allegations that the licensing agency was improperly influenced through campaign contributions.

Interestingly, many in the industry don't expect that events in Louisiana will have an effect on gambling elsewhere. The reason is the "Louisiana Factor," which to industry observers means a notorious political structure and a haphazard gambling regulatory regimen.11

As a result of the scandals, binding referendums on continuing gaming were placed on each of the 64 parish ballots. Each parish had the option of banning the gaming that was currently legal within the parish. In 30 of the parishes video poker was banned. The most important elections were on the continuation of river-based and land-based casinos. These all passed in the parishes that had casinos. In Orleans parish, the home of the land-based casino, two-thirds of the voters favored maintaining the casino.

Louisiana is not Alone in Having Scandals.

There Have Been Some Scandals Associated with California Cardrooms. In Irwindale, a city mayor's enchilada was spiked in 1972 by a then cardclub proponent who was later convicted of trying to drug the mayor in an effort to blackmail him and win his support for a casino.12 A scandal has recently occurred in California. A former chairman of the California Republican Party was indicted on charges of trying to influence a GOP Assembly Member. He offered the lawmaker a share of a proposed cardroom in Colma.

More recently, a member of the Compton City Council was indicted. She was charged with extorting money from a company seeking permission to build a cardclub in Compton.

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